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Exponent Core splits onchain yield asset into a Principal Token (PT) and a Yield Token (YT), enabling fixed-rate and leveraged yield strategies.

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How It Works

When a user deposits SY (Standardized Yield Token), the protocol strips it into two tokens:
  • PT (Principal Token): Redeemable 1:1 for the underlying asset at maturity
  • YT (Yield Token): Represents the yield component. To earn yield, YT must be deposited into a yield position — simply holding YT in your wallet does not accrue interest.
The number of PT and YT minted depends on the current SY exchange rate rr: 
Strip:   1 SY   →   r × PT  +  r × YT
Merge:   r × PT  +  r × YT  →  1 SY
For example, if the SY exchange rate is 1.05, depositing 100 SY produces 105 PT and 105 YT. At maturity: 
PT  →  Redeem for underlying asset (1:1)
YT  →  Collect remaining accrued yield, then expires
YT does not earn yield just by sitting in your wallet. You must deposit it into a YieldTokenPosition account so the protocol can track your balance and the exchange rate at entry. See the SDK Quickstart for the full deposit → stage → collect workflow.

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Strategies

  • Fixed rate: Buying PT at a discount locks in a guaranteed return. See PT: Principal Token for details.
  • Leveraged yield: YT provides amplified exposure to variable yield. See YT: Yield Token for details.
  • Pricing math: For the formulas behind PT/YT pricing, implied APY, and fee decay, see Pricing & Math.

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SDK Classes

The Core SDK exposes two main classes:
  • Vault — Loads market state and provides core instructions (strip, merge, initialize positions, collect interest)
  • YtPosition — Manages a user’s yield position (deposit/withdraw YT, stage yield, collect interest and emissions)

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Getting Started

SDK Quickstart

Core Concepts

Instructions

Read Functions